February finally welcomes lower fuel prices

February finally welcomes lower fuel prices
Motorists enjoyed a “reversal of fortune” in February as a three-month trend for rising fuel prices was bucked.

Over the course of what was a turbulent month weather-wise in the UK, conditions at the forecourt improved, with 2p a litre coming off the average price for both petrol and diesel – a result of a drop in the oil price.

Reductions sparked at the pumps of Britain’s ‘big four’ supermarkets came after continued calls from the RAC to pass on wholesale savings to drivers.

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February saw the average price of unleaded fall from 122.34p to 120.14p, while diesel dropped to 122.86p from 125.08p, data from RAC Fuel Watch confirms.

It was the first month in four to record a downward movement in pump prices – welcome relief for hard-pressed drivers who had seen petrol reach its highest level in three years in January.

It was made possible as the cost of a barrel of Brent crude sank to a three-month low of $61.46 on February 13. The reopening of the major Forties oil pipeline in the North Sea makes an additional half a billion barrels of oil a day available to the market.

The RAC commended the supermarkets for heeding its call for fair reductions as swiftly as possible – acknowledging the impact their pricing can have on other fuel retailers.

Fuel spokesman Simon Williams said: “We do understand how much harder it can be for smaller retailers who don’t buy as frequently as the supermarkets to cut their prices as a result of sudden or short-term wholesale price changes. However, we are aware of some smaller retailers who pride themselves on having very low prices.

“The question for drivers now, of course, is what happens to prices next. While the pound has weakened a little against the dollar – which is important as fuel is traded in dollars – the oil price remains around $65. This has created some downward pressure on wholesale petrol and diesel prices. Whether this means there is scope for another forecourt price cut in the next few weeks remains to be seen and is something we will monitor extremely closely.”

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A typical family petrol car (55-litre) now costs a typical £66.08 for full fill-up, rising to £67.57 for diesel.

These average prices drop to £64.34 for petrol and £65.75 for diesel on supermarket forecourts.

February also saw a continuation of the phenomenon of supermarket-led ‘hyper local’ fuel price wars, where fuel is being sold at loss in a bid to win customers to their stores.

For instance, in Taunton in Somerset three supermarkets have been trying to outdo each other to attract drivers, leading to prices as low as £108.7 for unleaded.

Copyright Press Association 2018. Motoring News articles do not reflect the RAC's views unless clearly stated.